By IANS,
New Delhi : Raising the foreign equity cap in the insurance sector to 49 percent will not lead to losing management control, the government informed parliament Monday.
“Increase in foreign equity holding limit to 49 percent in the insurance sector would not result in change in management control automatically,” said Minister of State for Commerce and Industry Jyotiraditya Scindia in the Lok Sabha, the lower house of parliament.
The government is in the process of raising the cap on foreign equity in the insurance sector from 26 percent to 49 percent, and a bill to give effect to the proposal is pending in the Rajya Sabha, the upper house.
The Insurance Laws (Amendment) Bill, 2008 had been introduced in the Rajya Sabha last December during the previous United Progressive Alliance (UPA) regime.
The bill provides enhanced shareholding by a foreign company – either by itself or through subsidiary firms or nominees in Indians insurance companies – from 26 percent to 49 percent, except in case of insurance co-operative societies where the limit would continue to be 26 percent.
Scindia also said there was no proposal to extend the limit of foreign equity in the media and the banking industries. Currently, there is a ceiling of 26 percent in these two sectors.